LONDON British group Aggreko (AGGK.L) has issued its second profit warning in two months, saying there would be less need next year for its generators, which provide temporary power worldwide.
Fewer U.S. troop numbers in Afghanistan, a likely fall in business in Japan as it recovers from the 2011 earthquake, and the absence of a summer Olympics would combine to take 100 million pounds ($161 million) off revenue, Aggreko said.
Analysts moved quickly to downgrade their forecasts, and shares in Aggreko, whose kit powers major events and covers electricity shortfalls, were down 16 percent to a 12-month low at 1,793 pence at 6:10 a.m. ET on Monday.
"We have got a double whammy going into next year," chief executive Rupert Soames told Reuters. "We have got a weakening demand environment in terms of our power projects business ... the other whammy going on is that we have got about 100 million pounds of revenue ... that is not going to recur in 2013."
On October 19, Aggreko warned on 2012 profit, saying it would be hit by bad debt provisions and foreign exchange rates.
Aggreko said it was waiting to learn whether contracts in Japan will be extended into the second half of 2013, foxing accurate predictions. "(It) is difficult at this stage to provide a definitive view of the likely pattern of trading."
Seymour Pierce said it expected the consensus for 2013 pretax profit to come down to about 355 million pounds from about 400 million. It maintained a "buy" rating on the stock.
"The underlying drivers, namely the continued supply demand power imbalance in developing countries, remain strong," analyst Caroline de La Soujeole said. "However, contract awards can be lumpy."
Aggreko said its 2012 performance was in line with expectations, and earnings per share should grow at least 15 percent.
Its local business division, which operates mainly in mature markets, was expected to post underlying revenues around 8 percent higher in the fourth quarter, while underlying margins on the international side were lower.
(Additional reporting by Paul Sandle; Editing by Rosalba O'Brien and Dan Lalor)